7/15/2005 @ 2:01PM

Ten Cars With The Best Residual Values

The luxurious, sporty German cars they adorn keep their value better than any other vehicles. In recently calculated data from car-pricing bible Kelley Blue Book, BMW was the only brand name with two entriesthe 7 Series sedan and 6 Series two-dooron a list of the ten new cars that should best hold their value over a four-year period.

You can see the ten cars in the slide show that follows. While the cars in the slide show are unranked, a spokeswoman from Kelley Blue Book said the 7 Series has the best residual value on the market. In the past, Kelley has also assigned BMW’s X5 sport utility the title of highest automotive residual value.

For some buyers and dealers, a car’s depreciation can be not only a crucial factor in a purchasing decision but the determinant of whether you will make a good choice.

Philip Reed of Edmunds.com, who has worked as an undercover car salesman, writes that “car dealers pay attention to depreciation and call this ‘buying right.’ A sales manager might be heard to comment, ‘He bought right in the first place, so when it was time to trade in he got strong money for his old car.’ ”

Statistically, the difference between buying “right” and “wrong” is huge. According to Reed, one car could be worth nearly 60% of its initial purchase price after five years, while another could have fallen to 20% of its starting value.

Kelley‘s data on residual values comes from current vehicle data, market conditions for each vehicle, expectations about the future economy and the combined experience of its editorial staff. The ten cars in the slide show are either luxury cars or vehicles in high demand, such as Toyota Motor‘s
Prius.

Supply and demand govern much of a car’s residual value. If it’s in low supply and high demand, it will probably retain value, and vice versa. But other factors can earn a car a high residual value. Depending on the model year of the vehicle in question, such features as power windows, cruise control and alloy or premium wheels don’t just add value to your car; value is deducted in their absence, due to the increasingly high expectations of car buyers.

To keep your new car worth its money, buy it in a conservative color, such as black, white or silver. Upscale options add value, so spring for such items as keyless entry, leather surfaces and a premium sound system. A larger engine, if one is optional, will add value. If you’re buying an SUV or wagon, a roof rack and a third row of seats will make your car easier to sell.

On the other hand, certain features will deduct value from your car, such as crazy exterior colors and wild aftermarket modifications. But some of the things that give a car a low residual value are out of your handsfor example, whether your car is widely available in rental fleets, whether it has a low perceived value, if it has high maintenance costs or if it has a design that will not age well.

Many cars end up having great residual values. When we first approached Kelley Blue Book for information, we asked for a ranking of the top ten residual values by percentage of original value to be retained. Kelley found that nearly 40 models tied for the top percentages. So Kelley‘s analysts, according to a recent e-mail from the company, “put their heads together to whittle down the list of 35-plus models to the list of ten below.”

Of course, cars, like fine wines, can have off-years. If a model year was infamous for recalls, it may not hold its value as well as a car of the same line from a year without problems. Curiously, a car with a high residual value, according to Kelley, may have scored poorly on Consumer Reports‘ reliability ratings. For example, the BMW 7 Series, which tops the list for residual value, also shared the more dubious distinction of its 2002 and 2003 models being named among the most unreliable cars on the market.

The cars in the slide show are all 2005 models and should retain about 50% to 55% of their initial purchase prices after four years. For the results of Kelley‘s researchand for what also happens to be a list of premium, or just hot, vehiclesplease follow the link below.